Tests Designed to Detect Goods That Arrived at the Warehouse

question 19

Multiple Choice

Tests designed to detect goods that arrived at the warehouse just before year-end and for which the audit client took ownership that have not been recorded in the perpetual inventory records until the subsequent year would most likely provide evidence about management's assertion of:

• A)accuracy.
• B)occurrence.
• C)valuation and allocation.
• D)cut-off.

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Definitions:

Deferred

Postponed or delayed actions or transactions, often referring to income or expenses that will be recognized in a future accounting period.

Released

In a financial context, it typically refers to the issuance or availability of funds, securities, or other financial instruments to the market or the public.

Year 1

The initial or first year in a given time frame or series, often used as a base year for comparison in financial and performance analysis.

Absorption Costing

An accounting method that includes all direct costs and allocated overhead costs (both fixed and variable) in the cost of a unit of product.